HBR: How Criticizing in Private Undermines Your Team

userpic-2060-100x100Our Summary: Criticizing employees in private is not healthy for the team.  A better approach is to, respectfully, raise the issue in a team meeting driving, peer accountability.

This relates to FairSetup in a huge way – the very process that we recommend to our clients encourages group feedback.  There are several elements here: Continue reading

ERE: 50 Top Problems with Performance Appraisal – the Most Dreaded HR Process

imageIt was fascinating for us to read about the Top 50 problems with Performance Appraisals on ERE.  It was even more amusing to identify how FairSetup addresses most of these problems.

The article written by Dr. John Sullivan starts out with a promising quote:

90% of performance appraisal processes are inadequate. –Salary.com survey

OK, something we already know.  He goes on to say:

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How does FairSetup compare to: Salary, Hourly, Stock Options, Equity, Bonuses?

FairSetup offers numerous advantages over existing models:

  • Salary/Hourly pay for time, not impact.
    • A high salary doesn’t always translate into productivity.
    • Paying hourly creates an incentive to spend more time.
    • FairSetup: people accept a lower salary and participate in the upside.  This “skin in the game” results in employees caring deeply about the outcome.
  • Stock Options/Equity are a bad short-term incentive.
    • Hard to evaluate actual worth.
    • Require significant effort to deploy.
    • Equity is hard to take away – there is no divesting.
      • Dilution is not a good solution for large dynamic teams.
    • Stock options generally expire after an individual leaves.
      • Stock options can have reverse vesting, but it’s rare.
    • Tax issues…
    • FairSetup: impact-based compensation can be paid out as part of salary and an individual automatically divests over time after departure.
  • Bonuses – are not an effective way to manage people unless very carefully used.
    • Small bonuses – people are upset because they don’t make enough.
    • Large bonuses – people are upset because then the boss must make an even larger undisclosed amount.
    • FairSetup: the compensation is transparently connected to profits.